The Analysts

DA Davidson Stays Long-Term Bullish

Skyworks' warning does not come as a surprise, especially after twin pre-announcements by Apple and Samsung Electronics Co Ltd (OTC: SSNLF), two of Skyworks' largest customers, analyst Diffely said in a Wednesday note.

New customer ramps did little to prop up December quarter results, the analyst said.

D.A. Davidson lowered its December quarter revenue estimate by $30 million and pro forma EPS estimate by 8 cents, but left the rest of its Skyworks model intact.

This year should be one of transition for RF semiconductor names as increased RF content is offset by macroeconomic- and China-driven weaknesses, Diffely said.

Although the move to 5G is the next big catalyst, it is likely to have a material impact only when 5G handsets start to ramp in 2020, he said.

With D.A. Davidson already having trimmed its 2019 expectations and price target for Skyworks, it left its calendar 2019 estimates unchanged Wednesday.

The firm said its long-term bullish thesis remains intact.

Raymond James: 'We Still Can't Call The Bottom'

The magnitude of the shortfall Skyworks predicted is in line with Apple's negative preannouncement last week, Raymond James analyst Caso said in a Tuesday note.

With the weakness manifesting in the December quarter as opposed to the firm's expectation of the March quarter, Caso lowered his estimates further, following up on estimate reductions announced last week after Apple's guidance cut.

Qorvo Inc (NASDAQ: QRVO) could also issue another warning if it sees weakness in December rather than in March, the analyst said.

"Although expectations throughout the Apple supply chain are quite low, we still can't call the bottom due to our expectations for a weak iPhone 11 cycle in the fall as well as the possibility that Apple could end of life one or more models, as it did last year."

The Price Action

Skyworks shares were trading up 4.37 percent at $68.04 at the time of publication Wednesday.